The Supreme Court of Vermont Law Blog: An on-going conversation about the practice of law in Vermont, featuring summaries of Vermont Supreme Court decisions, a dollop of lampooning, legal analysis, and a charming aggregation of creative thought.

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Friday, January 9, 2015

Snip, Snip, Snip

Vermont has a program called VSNIP that provides subsidized spaying and neutering for people’s pets. Everybody should get to have a pet if they’d like, because pets pretty much rule, and spaying or neutering the pet is the responsible thing to do. But it’s expensive, so a subsidized program for spaying and neutering pets helps make the procedure affordable for those who otherwise couldn’t afford it. From what I can glean from the opinion, it’s a state-run program but private organizations bid on a contract to provide the services.

Originally, Vermont Volunteer Services for Animals Humane Society (VVSA) had the state contract to provide the VSNIP, ah, snipping, shall we say. It used to be run by the Agency of Agriculture, but in 2011 was shifted to the Department for Children and Families (DCF). When DCF took over the program, it put out the contract for bid. VVSA bid on the project. So did VT-CAN! (This is not explained in the opinion, but I infer that VT-CAN! is another animal organization in Vermont.) DCF ultimately awarded the contract to VT-CAN!

The director of VVSA, Sue Skaskiw, sued on behalf of herself and VVSA, alleging defamation, a due process violation, and tortious interference with prospective economic advantage. The defendants moved to dismiss for failure to state a claim upon which relief can be granted, which the trial court granted and dismissed the case. Ms. Skaskiw and VVSA appealed, and SCOV affirmed.

There aren’t a lot of facts in this opinion, so it’s not totally clear what’s alleged to have happened here. It would appear that during the bid process, a DCF employee made a statement or statements, which Ms. Skaskiw believes caused VT-CAN! to get the contract rather than her own organization.

SCOV first looks at Ms. Skaskiw’s defamation claim. They do a clear analysis of defamation, and discussion of what a plaintiff needs to show in order to be successful in proving a defamation suit. A statement has to be derogatory, there has to be negligence or fault in publishing the statement to at least one other person, there can’t be privilege in the publication, damages, and some actual harm has to be made to the plaintiff such that damages could be awarded.

In other words, Person A must make a bad statement to Person B (at least to Person B, though it could be more people, too) about Person C, and Person C must suffer some actual damages as a result. If A writes the statement in her diary and nobody sees it, it’s not enough for a defamation suit. If A tells B but nothing happens to C, it’s not enough for a defamation suit. There are also times when A’s statement to B might be privileged, and in that case there might not be enough for a defamation suit. More on this below.

Here, the allegation is that Ms. Smith made statements about Ms. Skaskiw and her organization to other people working at DCF. SCOV adopts a conditional privilege for inferior state officers making statements within the context of their official duties. That is, if an employee makes a statement to another employee during his or her work, and the statement isn’t malicious, then it is privileged. SCOV also says that when a plaintiff files this kind of suit, and is trying to defeat this kind of privilege in the pleadings (sufficient to get past a motion to dismiss), that there’s got to be enough alleged that malice could at least be inferred. Here, SCOV finds that the trial court was right to dismiss this claim, as there was not enough in the pleadings to support an inference that Ms. Smith knew the statements she made were false or made for an improper purpose.

Ms. Skaskiw makes a due process claim in the bidding process itself. This was also dismissed by the trial court, and SCOV affirms this, too.

There are two kinds of due process – procedural and substantive. Substantive due process protects certain fundamental rights, like the right to get married and raise your kids and that sort of thing. Procedural due process has to do with fairness of procedure. Ms. Skaskiw and VVSA claimed that they had a liberty interest in the contract bidding process, and made an analogy to a substantive due process case.

SCOV disagrees, and finds that at best there was a property interest in the bidding process, not a liberty interest. Bidding on a contract isn’t deeply rooted in our nation’s history and traditions such that it becomes a liberty interst. Although there is a recognized property interest in state employment, that only attaches when someone has an actual claim to a benefit rather than an expectation. Here, Ms. Skaskiw and VVSA only bid on a contract; they had, as SCOV calls it a “unilateral hope” they’d get the work. There was no guarantee they’d get the contract again, so there was no actual claim to the benefit at that point.

Ms. Skaskiw and VVSA made a claim that the three individuals named in the suit – Ms. Smith, Ms. Haas, and Ms. Maloney – engaged in tortious interference with her economic relationship with DCF. This can happen if someone has a valid business interest, another person knowingly interferes with it and does so intentionally, and as a result the person who was disrupted can prove that the interference caused harm.

There also has to be a third party – that being someone interfering in a relationship. Here, SCOV finds that the three individuals weren’t third parties because the relationship that was alleged to have suffered the interference was between Ms. Skaskiw/VVSA and DCF, and the individuals were DCF employees. SCOV notes that this kind of interference could happen from the inside out, though, if there was enough of a showing of malice by the individuals.

SCOV finds that Ms. Skaskiw/VVSA couldn’t show a high enough level of malice through their statements. There was no allegation that whatever they said was borne out of spite or ill will, just that they didn’t want her to continue with the program.

Lastly, there is an allegation that DCF failed to manage VSNIP funds properly, to administer VSNIP properly, and to conduct it in such a way that avoids the appearance of a conflict of interest.

SCOV finds that most of Ms. Skaskiw’s/VVSA’s argument in this part has to do with a conflict of interest alleged relative to DCF and VT-CAN! But, this became moot because DCF administers the program, not VT-CAN! The opinion really isn’t clear why this relationship would be a conflict of interest.

SCOV finds that any mismanagement alleged because of the DCF- VT-CAN! contract is moot because that contract is over. Ms. Skaskiw wants SCOV to enjoin DCF from giving the contract to VT-CAN! again, but SCOV says that isn’t ripe; it’s not ongoing and there’s no case in controversy about it. Further, there’s no indication that’s going to happen again anyway.